A BUS OPERATORS GUIDE TO ADDING ELECTRIC VEHICLE SUPPLY EQUIPMENT TO YOUR OPERATIONS
Introduction
The federal government and NYS are designing incentive programs to encourage school districts and third-party school bus operators (SB Operators) to purchase electric school buses (EB) and the charging infrastructure necessary to support their deployment.
There are multiple programs with unique qualifying conditions. For instance, qualifying can depend on the location of the school district being served or even the location of the yard. Programs awards can also vary depending on such conditions as the number of EBs purchased and, in the case of NYS programs, whether a Fleet Electrification Plan has been prepared.
In addition, local utilities are participating in the transition to electric vehicles with “make-ready” programs that provide financial assistance toward the build-out of infrastructure necessary to bring sufficient electrical power to a location.
This guide is designed to assist SB Operators serving NYC/ Westchester/Long Island school districts with identifying which government and utility programs are available to them, how to apply for each program, and how to maximize each program’s benefits.
,It is important to note that the focus of this guide is on purchasing and installing electric vehicle supply equipment (EVSE), i.e., charging infrastructure, not the purchase of electric school buses. Many of the government programs require the applicant to have purchased or be purchasing EBs in order to qualify for assistance with acquiring EVSE. The information provided presupposes that the SB Operator has acquired or is in the process of acquiring EBs for their fleet.
Navigating the various programs, preparing applications for each, and coordinating awards so the SB Operator receives the appropriate benefit from each program is complex and time-consuming.
Sprocket Power has successfully designed, engineered, and installed client-specific solutions that have helped them navigate their transition to electric vehicles. This transition starts with the selection and installation of EVSE, including advocating on behalf of commercial businesses seeking to upgrade and increase their utility service. Our approach also includes planning for the future and the need for controlling the energy cost impacts of operating EVSE. Sprocket Power’s success starts with its leadership’s decades of experience in the energy industry, its strong relationship with metro-area utilities, and its consultative approach to meeting the client’s unique needs.
I. Incentive Programs
Each program has its own requirements that may impact an SB Operator’s eligibility to receive funding and the level of effort needed to apply. Programs also have different types of incentives that determine how and how much an applicant will receive awards.
A) Types of Program Incentives
- Tax Incentives – A tax incentive can come in the form of a deduction, exemption, or credit. Most tax incentive programs for school buses come in the form of a tax credit. A tax credit is a dollar-for-dollar amount that taxpayers can claim on their tax return to reduce the income tax they owe. Eligible taxpayers can use them to reduce their tax bill and potentially increase their refund.
- Voucher – A vehicle purchaser or lease operator agrees to purchase a piece of equipment from a vendor. The vendor will deduct the value of the voucher, like a coupon, from the total sale price. Once the piece of equipment is delivered, the vendor will receive a reimbursement for the voucher amount from the entity providing the incentive.
- Rebate – Awards that are typically redeemed after a purchase. Occasionally, a program offers a rebate ahead of a purchase, usually upon presentation of a purchase order.
- Grant – Applications for grants are typically more extensive than for rebates and vouchers. Grant awards are typically made on a competitive basis.
- Cost Cover – Utility “make-ready” programs pay for a percentage of utility-side infrastructure costs for developing EV charging capacity. The percentage of costs covered depends on the utility.
B) Program Requirements
Programs to fund Electric Vehicle Supply Equipment (EVSE), a.k.a. Charging Infrastructure, have differing eligibility requirements that may include the following:
- Fleet and/or Charger Location – This requirement can target fleets that are parked or operated in certain jurisdictions. These jurisdictions can include low-income areas, tribal lands, rural areas, areas with air quality challenges, and/or disadvantaged communities (DACs). This requirement can also target charger locations. Many funding programs prioritize fleets that serve historically marginalized communities and/or communities that do not have the financial resources to purchase new buses or EVSE.
- School District Type – Some programs focus solely on public schools, whereas others provide funding for public, charter, and/or private schools.
- Ownership – Some funding programs may only be available to school-district owned EVSE, while others may be available to EVSE owned by SB Operators and utilities.
- Eligible Charger Types – In some cases, only certain charger types (such as Level 2 or DCFC) are eligible.
- EB Procurement Pairing – Some charging infrastructure incentives can only be accessed as a follow-on or as a companion to an EB purchase incentive.
- Eligible Infrastructure Components – Utility-side distribution upgrades, customer-side transformers, or other facility improvements, as well as soft costs such as permitting and administration, may not be covered under certain program designs.
- Usage Requirements – Some programs may require a minimum amount of time the charger must operate and require ongoing reporting on charging data to receive funding.
C) Third-party Operators
SB Operator, a.k.a. Third-Party Operator, is defined as a party engaged by a school district to operate school buses and/or associated Charging Infrastructure on behalf of the school district for pupil transportation purposes. Subject to individualized qualifying requirements, SB Operators are eligible to participate in each of the programs listed below.
II. Programs/Funding Sources
A) EPA Clean School Bus Program: Grants
With funding from the Bipartisan Infrastructure Law, the EPA’s Clean School Bus Program (CSB) provides $5 billion over five years (FY 2022-2026) to replace existing school buses with zero-emission and low-emission models. EPA Region 2, which includes New York State, received $61 million of the total funds in 2023. The application dates for the 2024 Clean School Bus (CSB) program awards have not yet been set. In 2023, applications were due by August 22, 2023, and winners were selected in January 2024.
A CSB Rebate is a payment from EPA to an eligible entity to subsidize the purchase of a zero-emission
EB, EVSE, and other costs, including workforce training. Rebates allow selectees to receive awarded funds before purchasing the buses and associated infrastructure listed in their application.
It matters where the school district served by the SB Operator is located and where the charging infrastructure is located. SB Operators in high-need, low-income, rural, tribal school districts will receive priority during EPA’s award selection process.
EVSE funding is paired with EB procurement. In other words, SB Operators wishing to receive funding for EVSE must demonstrate ownership of or pending purchase of EB. EVSE components that are eligible for CSB rebates include installation, utility-side distribution upgrades, customer-side electrical service installation, and charge management software. CSB will cover a maximum of $20,000 of charging infrastructure per bus.
For more information about CSB, go to: https://www.epa.gov/cleanschoolbus
B) Alternative Fuel Vehicle Refueling Property Credit
The Alternative Fuel Vehicle Refueling Property (AFVRP) credit is an extension of the Inflation Reduction Act (IRA). SB Operators that have installed qualified vehicle refueling and recharging equipment may qualify for the alternative fuel refueling property tax credit.
To be eligible for the credit, qualified alternative fuel vehicle refueling property must be placed in service in one of two types of population census tracts (or both if the population census tract qualifies under both categories). The categories are:
Low-income community census tracts: Census tracts as described in the “low-income community” definition of the New Markets Tax Credit (NMTC) (Internal Revenue Code section 45D).
Non-urban census tracts: Census tracts are defined as “non-urban” according to Treasury/IRS guidance. Fleet and/or Charger Location: Low-income community or non-urban census tract.
The AFVRP credit can be applied to the cost of EVSE charging infrastructure and Bi-directional charging/Vehicle-to-Grid (V2G) equipment. EVSE for electric vehicles is eligible for a tax credit of 30% of the cost or 6% if the property is subject to depreciation. There is a $100,000 cap for this tax credit.
For more information about AFVRP go to: https://www.irs.gov/credits-deductions/alternative-fuel-vehicle-refueling-property-credit
C) Joint Utilities of New York Medium-and Heavy-Duty EV Make-Ready Pilot
SB operators in the service areas of the “Joint Utilities” (JU) of New York (i.e., Central Hudson Gas and Electric Corp; Con Edison; National Grid; NYSEG; Orange and Rockland Utilities, Inc.; and RG&E) can access funding for charging infrastructure from their utility. Funds are limited, however, and available on a first-come, first-served basis. Each participating utility will accept applications until December 31, 2025, or until available incentive funding has been fully allocated, whichever comes first. Each of the utilities has unique requirements related to the pilot.
The SB operator must provide transportation services within the JU’s service area, or the chargers must be located in the JU’s service. Like the CSB program, if the fleet operates within a disadvantaged community (DAC) or the chargers are within a DAC, then the application for funding is prioritized.
“Utility-side” (sometimes referred to as “in-front-of the meter”) charging station infrastructure for EBs, including Level 2 (L2) or Level 3 (L3) chargers, are eligible for the JU programs. The JU will cover up to 90% of utility-side infrastructure costs of developing EV charging capacity. One significant caveat is the SC operator must be approved for participation in either the New York Truck Voucher Incentive Program or the NYC Clean Trucks Program so that the support for EVSE is paired with the purchase of EBs.
For more information about each JU’s Make-Ready program, go to:
Central Hudson: https://www.cenhud.com/my-energy/electric-vehicles/EV-make-ready-program/
Con Edison: https://www.coned.com/en/our-energy-future/electric-vehicles/power-ready-program
National Grid: https://www.nationalgridus.com/Upstate-NY-Business/Energy-Alternatives/Commercial-and-Fleet-EV-Charging-Programs
NYSEG: https://www.nyseg.com/smartenergy/electricvehicles/demand-charge-rebate-program
Orange and Rockland Utilities: https://www.oru.com/en/our-energy-future/electric-vehicles/new-york/commercial-ev-drivers/fleet-owners-and-operators
D) PSEG Long Island’s Electric Vehicle Make Ready Program
PSEG Long Island, which operates the electric distribution system on Long Island on behalf of the Long Island Power Authority (LIPA), provides funding to support EVSE with incentives that may cover up to 100% of eligible make-ready costs for light-duty vehicles. (PSEG-LI proposed that school bus fleets qualify for this program in a recent filing, a decision is expected in Winter 2023-24), including utility-owned equipment and customer-owned equipment. Applicants with multiple chargers, located less than a mile from a DAC, and offer their chargers for public use will receive the maximum incentive.
PSEG will cover up to 100% of utility-side and customer-side infrastructure costs. PSEG DOES NOT require the SB operator to own EBs to participate in their program. PSEG will cover the cost distribution network, transformers, meters, and conductor on the “utility side”. On the customer side, the program will cover the panel, conductor, boring, trenching, and conduit.
Total Available Funding at commencement of PSEG’s program was $4.28 million.
For more information about PSEG Long Island’s Electric Vehicle Make Ready Program, go to: https://www.psegliny.com/en/saveenergyandmoney/GreenEnergy/EV/MakeReady
E) New York School Bus Incentive Program (NYSBIP)
The NYSBIP is an incentive program that provides grants to a school district to offset all or a portion of the purchase price of EBs and/or associated Charging Infrastructure. The program is administered by the New York State Energy and Research Authority (NYSERDA).
In the case where a school district contracts with an SB Operator to provide school bus services, the Charging Voucher is a reimbursement to the owner of the chargers. The owner SB operator submits an application. Once approved, they can install the chargers. After the chargers have been installed and are operational, the owner submits for redemption and NYSERDA will reimburse the owner for eligible costs up to the voucher amount.
Charging Voucher Requirements and Amounts
SB Operators applying for a Charger Voucher must have initiated an EB purchase either through NYSBIP or with other funding (e.g. EPA Clean School Bus Program, self-funded) for any EB purchased on or after January 1, 2023.
Charging Voucher amounts are determined based on Priority District status and whether the Purchaser has conducted a Fleet Electrification Plan.
Non-Priority District
$25,000
Priority District
$35,000
With Fleet Electrification Plan
$55,000
Priority District
$65,000
NYSERDA will calculate the dollar amount of the Charging Voucher by multiplying the per-bus amount the Purchaser is eligible to receive by the total number of EBs being purchased. For example, if a Purchaser serving a Non-Priority District purchases five (5) EBs, they may receive a $125,000 Charging Voucher or $25,000 for each EB they are purchasing.
Each Purchaser is limited to $2 million in Charging Voucher funds before December 1, 2025.
Fleet Electrification Plan Contents
- Title
- Description
- Electrification Goals
- An overview of the electric bus assessment and the approach to fleet electrification. This may include the proposed timeline and milestones for electrification.
- Route Analysis – Analysis of the time and distance involved in each available bus route, which is necessary to understand the range requirements. The analysis will define the specification requirements (hilly, etc.) for each bus route to provide recommended minimum battery requirements and the total energy required to charge the batteries.
- Utility Assessment – An assessment performed by your utility that analyzes your existing grid connection and determines how much additional electrical capacity is required. This assessment will tell you what equipment needs, upgrades, and costs are needed to provide that additional power.
- Charging Strategy – Development of a charging strategy that includes Charger power ratings, quantities, and preferred times of day to charge. The charging strategy will include the identification of demand during on-peak and off-peak times.
- Phasing Plan – Development of a phasing plan identifying necessary capital works projects, vehicle replacement plan, and phased plan for Charger Installation aligned with a vehicle replacement plan. This phasing plan should include a schedule and transition cost estimate for utility upgrade/site work, bus purchases, and Charger purchases, as well as a comparison of operating costs.
To demonstrate the completion of a qualifying Fleet Electrification Plan, SB Operators will need to provide a copy of their Fleet Electrification Plan with their Charging Voucher Application.
For more information about NYSBIP, go to: https://www.nyserda.ny.gov/All-Programs/Electric-School-Buses/NY-School-Bus-Incentive-Program-Overview
